Reuters recently reported that PPG Industries and the private equity firm Clayton, Dubilier & Rice LLC (CDR) are among groups considering acquiring Axalta Coating Systems. Also reported to be considering a bid for Axalta is a partnership between Platinum Equity LLC, and Koch Industries Inc.
Apparently, the partnership between PPG and CDR could also include Singaporean sovereign wealth fund GIC and US asset manager BlackRock. The partnership would help alleviate antitrust concerns if PPG were to acquire all of Axalta on its own, instead allowing it to pick up complementary businesses.
The report said the auction process for Axalta was ongoing and a deal might not result. In June, Axalta announced that its board of directors had initiated a review of strategic alternatives to maximise shareholder value and formed a strategic review committee.
Consolidation in the coatings business has been a frequent topic over the past few years. In 2017, Axalta and AkzoNobel explored a potential merger of the two global coatings companies. Those talks concluded without a deal. The discussion on the merger followed AkzoNobel’s rebuffing of an unsolicited merger offer from PPG Industries earlier in 2017. PPG ultimately declined to make a hostile takeover bid for AkzoNobel.
In May this year, PPG announced that two separate and independent reviews of its business portfolio were completed by Goldman Sachs & Co and Morgan Stanley & Co, with each firm independently conducting multi-faceted evaluations of PPG’s business portfolio, including potential separation opportunities.
Based on the reports and its own evaluation, PPG’s board determined that maintaining the company’s current business portfolio composition, including its architectural and industrial coatings businesses, provides the best opportunity to maximise long-term shareholder value.
This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out their website at: www.collisionweek.com.